Prime Minister John Key needs the film industry to succeed in New Zealand - not only to create much-needed jobs, but to justify a $30 million payout to one of the world's biggest entertainment companies.

Warner Bros not only received tax rebates and help with marketing costs, Key's first-term National Government rewrote labour laws specifically for the industry to secure production of The Hobbit films in New Zealand.

Ahead of his trip to Los Angeles this week, Key would not rule out further law changes but said it was "unlikely". For now.

His whistle-stop tour of California film studios this week is an answer to critics who slated the deal.

It is also a promotional tour.

Sir Peter Jackson is cloistered in his Miramar studio putting the finishing touches on the first Hobbit film. The stars will be flying in from around the world when the red carpet is rolled down Wellington's Courtenay Place for the premiere on November 28.

The excitement is palpable, with Mayor Celia Wade-Brown promising a "celebration to remember".

But Key's Hollywood ending is not a done deal just yet.

The Hobbit films were said to be a $670m production, though how much of that stayed in New Zealand is unclear.

Key needs continuous and significant productions being made on our shores.

Film New Zealand chief executive Gisella Carr believes we are almost there.

There had been "solid inquiries" about future feature film projects but nothing confirmed.

Film-maker James Cameron, who has bought large amounts of land in the Wairarapa, wants to film two Avatar sequels here.

Most people, Carr says, do not see the constant business behind the intermittent star-sightings.

"Really, New Zealand has had remarkable success in taking the Lord of the Rings moment and turning it into an ongoing industry."

Carr is in Los Angeles with Key, and says his trip is recognition that New Zealand's screen industry has come of age.

"Often people do worry that we've reached capacity but, I mean, just this year alone, in terms of feature films, we've had The Hobbit - which is like staging the Olympics - we've had Evil Dead, shooting the remake of the cult classic in Auckland, and we've had . . . Emperor that Peter Webber of Girl with a Pearl Earring is shooting, and Mr Pip of course.

"It's a hugely competitive world . . . two years ago Serbia ran a campaign called 'New Zealand but cheaper'. And this year Northern Ireland's got one that is 'Northern Ireland, the new New Zealand'."

The prime minister's screen-centred trip will be noticed, she says.

A spokeswoman for Sony Pictures says it was "an honour" that Key visited their studio lot.

Carr said television productions, particularly compelling dramas such as Mad Men and Game of Thrones, were the future for the local industry.

Ironically, Game of Thrones is being filmed now in Northern Ireland.

"People all round the world are very keen to have that kind of business because feature films are like the icing on the cake, but television is the sustaining bread," she says.

Tourism Industry Association chief executive Martin Snedden says tourism operators leveraged off the increased interest that shooting films such as the Lord of the Rings created. Key says the studio bosses he met are also positive about film-making in New Zealand.

Executives at an exclusive dinner hosted by Cameron's business partner, Jon Landau, mentioned Australian Prime Minister Julia Gillard's recent promise to increase subsidies for films made across the Tasman.

But Key says they were realistic that, despite the Australian incentive, subsidies are unlikely to increase here.

"I think studios would always want more, I mean I think that's the default starting position, but I think they recognise that that's not likely to be on the table and that there are many other benefits [in New Zealand]."

New Zealand was not in a race to offer the top incentives - rather, Key spent his trip promoting the other positives of the industry.

He visited the set of television drama Body of Proof and met The Mentalist star Simon Baker.

"I think the fact that I turned up really resonates," Key says.

Television is the obvious area for expansion in the film industry and the Government is looking at what it could do to further entice production.

That includes the way some of the subsidies are bundled, he says.

"I think if we could underpin the lumpiness of the blockbuster movies with more thriving television work, we'd have a very thriving industry."

Any changes will be "in the margins". It's not just labour law changes that have brought accusations that Key was sidling up to the United States entertainment industry.

The studio executives the prime minister dined with on Thursday night are the same ones driving the copyright case against Megaupload founder Kim Dotcom.

The Government's disastrous handling of US attempts to extradite German-born Dotcom has raised concerns that New Zealand will do almost anything to stay on side with the superpower.

Labour deputy leader Grant Robertson says the No 1 issue for the American movie industry is copyright and downloading, particularly the case against Dotcom.

Mr Robertson is right when he said it was "inconceivable" that Dotcom would not have come up in conversation.

Motion Picture Association of America chief executive Chris Dodd raised the Dotcom saga at the dinner, but only in passing, Key says.

Robertson, the Wellington Central MP, says he supports fostering the film industry, but Key must give an assurance that no more laws are up for sale.

Because there's a darker side to the film industry relationship too.

It's one that Jon Woolf, former crew head of the miniatures department for Lord of the Rings, discovered when he made noises about unionising the workforce.

Woolf returned to New Zealand after decades working in Hollywood and says he was concerned at the safety and conditions for those working on set.

He claims to have been fired the day after meeting publicly with a union boss and to have settled a subsequent employment dispute for a "stupidly small" amount.

Woolf says he was blacklisted in New Zealand and forced to return to the United States to find work.

"The New Zealand public has been hoodwinked over and over again and been told what nice people they are . . . [The executives] are off in their boardrooms lighting cigars and laughing their arses off because they're making megabillions out of it."

Council of Trade Unions president Helen Kelly led the charge against the National Government's rewrite of employment laws to ensure the The Hobbit was filmed in New Zealand.

She welcomed Key's trip to Los Angeles - but suggests he do the same promotion work for all industries.

However, the cost must not be the removal of workers' rights.

"Removing workers' rights, enslaving us all basically, reducing wages, removing work rights, contracting people, all it does is make workers precarious, less secure, less willing to invest in themselves . . . It doesn't build a decent long-term industry."

The so-called "Hobbit law", which clarified the distinction between independent contractors and employees in relation to the film industry only, had removed employers' responsibilities but none of the employees', Kelly says.

In contrast, the Government refused to step in and help after job losses in the manufacturing sector.

Key says the efforts the Government is making for the film industry are worth the rewards.

Yes, we have to pay subsidies to companies worth billions of dollars, there have been law changes to accommodate them and trips across the Pacific to woo them.

On the other hand, there have been thousands of jobs and a tourism boost from visitors inspired to see the scenery shown in the films.